Discretionary Order

AAA

DEFINITION of 'Discretionary Order'

An order giving a broker the ability to decide when to buy/sell securities at the best possible price for the customer. Some discretionary orders place restrictive terms to limit the amount of discretion the broker has.

INVESTOPEDIA EXPLAINS 'Discretionary Order'

When placing a discretion order, the investor is giving limited discretion to the broker and allowing for the timing of buying/selling to be decided by the trader.

RELATED TERMS
  1. Limit Order

    An order placed with a brokerage to buy or sell a set number ...
  2. Stop Order

    An order to buy or sell a security when its price surpasses a ...
  3. Time-Of-Day Order

    An order to buy or sell an asset that is placed at a specific ...
  4. Market Order

    An order that an investor makes through a broker or brokerage ...
  5. Autotrading

    A trading strategy where buy and sell orders are placed automatically ...
  6. Bidding Up - Securities

    The act of increasing the price an investor is willing to pay ...
RELATED FAQS
  1. Are stop orders only used for stocks?

    Stop orders can be used for a variety of securities and are not limited to stocks. They can be extended to other securities, ... Read Full Answer >>
  2. Should I enter a limit order to buy a position with a bid and ask that are far apart?

    You face the risk of losing the spread in a security with a bid and ask that are far apart when you enter a market order. ... Read Full Answer >>
  3. When should I use a trailing stop order?

    Trailing stop orders are used to limit losses and protect profits on a stock position. You should use trailing stop orders ... Read Full Answer >>
  4. How can I use a stop order to limit my losses on a long stock position?

    A stop order is a useful order type when you are trying to limit losses on your long stock position. When you are long a ... Read Full Answer >>
  5. What is the difference between a stop and a market order?

    A stop order and a market order are different order types that dictate how to enter and execute trades. Traders and investors ... Read Full Answer >>
  6. How can I use a buy limit order to buy a stock?

    An investor uses a buy limit order to buy a stock at a specific price or better price. Unlike a market order that takes the ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  2. Investing Basics

    Explaining Buy Limit Orders

    A buy limit order allows traders and investors to specify the price that they are willing to pay for a security, such as a stock.
  3. Trading Strategies

    Making The Trade: Understand Order Types

    Buying and selling stock can be a lot like buying or selling a car. Traders should use and understand tools such as market orders, limit orders, day orders, and good-'til-canceled orders to ensure ...
  4. Trading Strategies

    Patience Is A Trader's Virtue

    Waiting may be the biggest key to reeling in that trophy investment.
  5. Investing Basics

    Narrow Your Range With Stop-Limit Orders

    With stop-limit orders, buyers protect themselves from prices too high for their tastes.
  6. Trading Strategies

    How to Use Trailing Stops

    A trailing stop is an order to buy or sell a security if it moves in an unfavorable direction.
  7. Active Trading

    Pinpoint Winning Trade Entries With Filters And Triggers

    These tools will help you enter at high-probability points and ensure you trade within your set strategy.
  8. Active Trading Fundamentals

    Trailing-Stop Techniques

    The important decision to exit a position must be based on more than emotion if you want to be a disciplined trader.
  9. Investing

    Stop Limit Orders

    A stop limit is an order to sell or buy a stock once it reaches a certain level, but only if the shareholder can obtain a specified price.
  10. Investing Basics

    Understanding The Basics of A Stop-Limit Order

    There are many techniques used by investors and traders to restrict losses or lock in gains. The stop-limit order is one such technique.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center